India and the United Kingdom have signed an “ambitious and mutually advantageous” free trade agreement (FTA) that will enhance the bilateral comprehensive strategic partnership and spur trade and investment, Prime Minister Narendra Modi announced on Tuesday after a discussion with his British counterpart Keir Starmer.
Deal Sealed by Modi After Delays Since 2022 Deadline
The agreement was sealed three years after Prime Minister Modi and then British counterpart Boris Johnson had set a deadline of October 2022 for its completion. Talks since then faced repeated disruptions. Disagreements over tariffs on alcohol and cars, along with political instability in the UK, delayed progress.
“Delighted to speak with my friend PM @Keir_Starmer. In a historic milestone, India and the UK have successfully concluded an ambitious and mutually beneficial Free Trade Agreement, along with a Double Contribution Convention,” PM Modi said in a post on X on Tuesday evening.
Delighted to speak with my friend PM @Keir_Starmer. In a historic milestone, India and the UK have successfully concluded an ambitious and mutually beneficial Free Trade Agreement, along with a Double Contribution Convention. These landmark agreements will further deepen our…
— Narendra Modi (@narendramodi) May 6, 2025
Modi: Agreements to Deepen Strategic Partnership
“These landmark agreements will further deepen our Comprehensive Strategic Partnership, and catalyse trade, investment, growth, job creation, and innovation in both our economies. I look forward to welcoming PM Starmer to India soon,” he said.
The two leaders characterized the development as a milestone in history that will build trade, investment, innovation and job creation for both economies. They concurred that the understandings between the “two large and open market economies” will create new business opportunities, improve economic interconnections, and expand people-to-people contacts, as per an Indian readout.
Starmer Links FTA to UK’s Economic Plan
Starmer stated “building alliances and lowering trade barriers with economies across the globe” is one of the UK’s “Plan for Change” to provide a stronger and more secure economy, the readout added.
More information regarding the trade agreement was anticipated by Tuesday evening in the shape of official pronouncements from both nations. The trade negotiations breakthrough came after two consecutive trips to the UK during the past week by commerce minister Piyush Goyal to meet British trade secretary Jonathan Reynolds to drive the discussions to the endline.
The Indian country was the 11th biggest trading nation of Britain for the four periods to the closing quarter of Q4 2024 and responsible for 2.4% of UK’s total trade.
Bilateral Trade Figures Show Significant Growth
Total trade in goods and services between the UK and India was £42.6 billion in the last four quarters to the close of Q4 2024, up 8.3% from the last four quarters to the close of Q4 2023. This comprised Indian exports to the UK of £25.5 billion in the last four quarters to the close of Q4 2024 (up 10.1% from the last four quarters to the close of Q4 2023), and UK exports to India were £17.1 billion in the same timeframe (up 5.8% from the last four quarters to the close of Q4 2023).
